How Predictive Analytics Can Shape CX
What if your company could predict exactly what each of your customers needed and when they might think about browsing or making a purchase? Would this predictive ability help you increase revenue and improve the customer experience? Of course, it would. This kind of insight would be like a superpower.
This is already possible, and many industry analysts believe that the future of customer experience will focus on knowing exactly what each customer wants and when they want it.
Traditional customer feedback relied on surveys. This was always a reactive and inaccurate process, gathering information only from customers who had time to complete a survey. Now, we can use analytic systems to explore and blend the data we have on customer behavior with additional sources of information.
Predictive analytics offers more to customers than just recommendations or offers. It can help to protect customers from fraud by identifying unusual transactions or scanning network traffic and identifying a potential data breach. Throughout the entire relationship between a customer and brand, there is an opportunity for predictive analytics to create a closer bond.
Personalization
The most noticeable advantage is personalization. The ability to predict what a customer wants or needs creates a huge advantage. It’s like walking into your local coffee store and being welcomed by your name. Imagine knowing exactly what each customer likes, dislikes, and spends time looking at when browsing. This creates the ability to offer deals and recommendations that are very specifically targeted at individual customers.
This also has important implications for companies that use a subscription or regular monthly charge—streaming services, utilities, and phone companies are all good examples. Identifying behavior that customers exhibit just before canceling their contract creates an opportunity to prevent them from leaving. Imagine how much customer churn could be reduced if you had the ability to predict what customers may be thinking.
Using Analytics to Create Value
Research by McKinsey suggests that only 37% of companies use advanced data analytics to create value in customer relationships. This is an enormous missed opportunity. By understanding what your customer wants, you can reduce costs, increase revenue, and increase customer satisfaction and loyalty.
Companies often fail when using analytics because data is scattered throughout the organization, and they cannot generate insight—and, therefore, actions—from the available data.
This is where a partner can be extremely helpful. A partner with knowledge of how to design a fantastic customer experience and how to generate insights from customer data can unlock enormous value.
Predictive analytics lets you get closer to your customers by predicting their needs. You can even design automated offers so customers see a special offer created just for them. This can also feed into the product development process, by understanding how your customers are behaving, you can design more appealing products.
The Bottom Line
Predictive analytics allows brands to be more proactive, responsive, and personalized in their customer interactions, fostering stronger relationships and driving business growth. Managing the customer experience without this analysis is like driving in the dark without lights. You might eventually get to your destination, but others will get there first!
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